As the Obama Administrations EPA continues to prosecute their war on energy production, consumers are the ones feeling the bite. That according to a recent article at FOX News, and a report by the Institute for Energy Research. And South Dakotans are directly in the line of fire in that war:
The energy industry and coal-producing states are projecting a wave of power plant closures in the final two years of the Obama administration as Environmental Protection Agency regulations take hold.
The goal of the agency’s campaign is to cut down on carbon pollution. However, industry groups and agencies say the EPA’s demands are simply too difficult to meet and will lead to powering down many facilities — eliminating hundreds of jobs and hurting cash-strapped state economies.
“It’s a game we can’t win,” Alan Minier, chairman of the Wyoming Public Service Commission, told FoxNews.com.
The GAO’s report reinforced concerns many Republicans have that the EPA’s rules are closing down plants. House Science Committee Chairman Lamar Smith, R-Texas, this week urged McCarthy to scrap the “outrageous” power plant proposal.
The EPA argues that efficiency improvements will pay for themselves in terms of fuel costs and other health and environmental benefits.
While Wyoming has a tough climb to meet the standards, its neighbors are no better off.
Colorado and South Dakota need to cut carbon emissions by 35 percent, Utah by 27 percent, and Montana by 21 percent — while Idaho faces a 33 percent reduction.
And these closures aren’t minor. In fact, according to the Institute for Energy Research, it’s a massive portion of our national power infrastructure:
More than 72 gigawatts (GW) of electrical generating capacity have already, or are now set to retire because of the Environmental Protection Agency’s (EPA) regulations. The regulations causing these closures include the Mercury and Air Toxics Standards (colloquially called MATS, or Utility MACT), proposed Cross State Air Pollution Rule (CSAPR), and the proposed regulation of carbon dioxide emissions from existing power plants.
To put 72 GW in perspective, that is enough electrical generation capacity to reliably power 44.7 million homes—or every home in every state west of the Mississippi River, excluding Texas. In other words, EPA is shutting down enough generating capacity to power every home in Washington, Oregon, California, Idaho, Nevada, Arizona, Utah, Montana, Wyoming, Colorado, New Mexico, North and South Dakota, Nebraska, Kansas, Oklahoma, Minnesota, Iowa, Missouri, Arkansas, and Louisiana.
(And in case it entered your mind, 72 gigawatts is also the capacity to power 59.5 time-traveling DeLoreans).
The EPA’s action is set to shutter fully 1/5 of the nation’s coal generating capacity. This is far, far more than they initially believed their rules would affect. And the estimates of power capacity being taken off-line keeps climbing:
It should be further noted that the North American Reliability Corporation’s (NERC) original modeling of the MACT rule and original CSAPR rules estimated that under the worst case, or “strict” scenarios, 16.3 GW of electricity capacity would be closed due to the regulations, and the Department of Energy’s (DOE) “stringent” test showed that only 21 GW of generating capacity would be closed. More recently, however, NERC has admitted that, “Since January 2011, the introduction and implementation of several environmental regulations combined with increased natural gas availability has contributed to the closure of nearly 43 GW of baseload capacity.” NERC has shown concern that the closures will cause electricity reliability problems.
As noted in our previous update, public statements and the Utility MACT itself showed that EPA relies heavily on a DOE study claiming that even under a theoretical “stringent” test, EPA Utility MACT and CSAPR regulations would only close 21 GW of generation. EPA then claimed this study proves regulations will not threaten reliability. Our analysis, however, shows that with the addition of President Obama’s newest proposed rules, EPA projections and operator announcements will total more than 72 GW of generation retirements—over 50 GW more than DOE’s supposedly ultrastrict test scenario.
At this point, we’ve gone from 16.3 GW of coal fired electrical capacity being taken off line, to more than 72 under the newest proposed rules. And what’s the end result? With the reduced capacity coupled with continued demand, it’s simple economics – electricity prices for homes and businesses across the country are going up, and will to continue to do so.
To be South Dakota specific, we’re already feeling the bite from the increased costs the Black Hills Corporation – who took their Rapid City “Ben French” coal-fired plant off-line in 2012 – face as a result of new EPA regulations:
To comply with environmental standards, including new U.S. Environmental Protection Agency regulations and Colorado’s Clean Air – Clean Jobs Act, Black Hills Power and Black Hills Energy – Colorado Electric plan to permanently retire 124 megawatts of coal-fired generating facilities in Colorado, South Dakota, and Wyoming. Retrofitting the facilities with the emissions controls to meet current regulations is not economical. The plants to be retired and projected retirement dates include:
- The 42 MW coal-fired W.N. Clark plant on Dec. 31, 2013.
- The 25 MW coal-fired unit at the Ben French power plant, as well as the 34.5 MW Osage and 22 MW Neil Simpson 1 coal-fired power plants on March 21, 2014.
“Our industry continues to face increasingly stringent environmental regulations and changing energy demands which drive up costs for customers.
What was the early result of the regulations? A rate increase request in 2012. And 2014. In fact, both increases were directly attributed to the EPA action and the fact it was forcing them to build new:
However, Crocker said, the overwhelming majority of revenue from the proposed rate hike is intended to cover the cost of replacing three coal-fired power plants.
Crocker said those three plants, which have served the Black Hills for more than 50 years, are no longer in compliance with new emissions standards from the Environmental Protection Agency. Black Hills Power could have retrofitted the new plants, but the company decided it was cheaper to invest in a new natural gas plant in Cheyenne, Wyo.
Some might say that this will be cleaner in the end. Maybe. Maybe not. Because the question remains “where are they going to get much of the natural gas for this new gas fired plant?” One of the most significant sources for natural gas is oil production, which is also a target of the Obama administration.
South Dakota’s US Senator John Thune has been a leading voice in the state expressing concern about the EPA’s over reach in terms of energy production. He’s introduced actions to block ozone rules, he’s expressed concerns at the effect these energy regulations are going to have on farmers. When Senator Thune talks about the job-killing EPA, he’s not overstating it. If anything, he’s understating the effect EPA regulations are set to have on our country’s economy.
In a recent release referring to the EPA regulations driving up costs for South Dakotans , Thune noted:
“Make no mistake, the administration’s proposed rule is nothing more than a national energy tax that will be yet another sucker punch to middle-class families throughout South Dakota struggling to get by in the Obama economy. These regulations, which will increase electricity costs, will especially hurt low-income families and seniors who live on fixed incomes and already devote a large share of their income to electricity bills. In addition to hurting families, the regulations will destroy jobs, while essentially doing nothing to improve our global environment. The president’s proposed regulations are lose-lose-lose.”
“The president’s proposed regulations are lose-lose-lose.” We’re going to lose power plants & energy production capacity. We’re going to lose national energy security. And we’re going to lose money out of our paychecks to pay for the administration’s war on energy production.
It’s hard to summarize it any better than that.